Gday all,
I am trying to understand the movement in LTR lately. I wasn't going to post on the LTR forum given the massive rises of late, noting that any such post would be labeled as a trader down ramping (which is not true) - the way I read the market, it doesn't make any sense to me, so if you read it differently, I would really appreciate your input. I know we have some LTR holders here, and I genuinely wish everyone all the success, it has been a long wait for LTR and I can only hope that CXO isn't too far behind.
I knew that LTR had some good long term prospects, but I am genuinely surprised by the SP lately. I'll justify why, compare it to CXO, and request some input about my thoughts, or our future.
With all that in mind, here is why I think the SP for LTR seems out of kilter:
1. 1.7b share on issue, 5mil in the bank, a planned 2.5m gold campaign as well as progressing towards a DFS - all this to me means a CR very soon.
2. 5 years until production, will the SP seriously remain at current levels or higher for the next 5 years without any revenue?
3. 8 years until profitability, so the SOI ballooning higher is a risk to me.
4. approx 400m capex, meaning that I assess the possibility of at TO as being remote. Any buyer would be looking at minimum 400m (likely much higher as SH would want a premium) to buy the company, plus 400m to develop the operation for at currently assessed NPV of 1.1bn.
5. A recognised native title claim that isn't assessed as being settled until 2021
6. No environmental approvals yet
7. No finance
8. No Government approvals other than mining lease
To me, the above means there are still some real risks, so is all this balanced out by:
1. A management team that is genuinely invested in the company
2. A masive resource
3. Undefined gold prospects?????
Now to CXO:
CXO is basically at the other end of the curve in most aspects:
1. A much smaller resource, but one that is big enough to be profitable and good prospects to make it bigger
2. All government and environmental approvals in place - did we solve the water issue yet?
3. Most of the production resource accounted for (40% via binding and 45% via MOU)
4. Small CAPEX ~80m
5. Very short timeline to market, meaning the company could be profitable within 12 months of finance
6. Low costs of production
7. Undefined gold and silver prospects?????
Is the above for CXO balanced out by a management team not heavily invested or by the smaller resource?
It feels like the CXO SP needs another decent kick, we are at that point (as usual) where the SP has had some good interest, but if we don't get another decent announcement soon, then we may end up drifting back to the mid 4's until we get one, and then it will be rinse and repeat all over again. I am hoping we can finally break through the 6c barrier, but note that we need some good news to do that. CXO has historically failed to deliver the required punches at the appropriate times, we would normally just tick along at times like this with an absence of news - will this time be different?
I have thought a bit about selling some shares lately - I haven't, as the general rule for when the market is at the bottom is when despair shows itself. I noted that I was getting to that point about a month ago after holding for over 3 yrs but realised what I was doing, so I figure the we must be at the bottom - anyone else see this the same?. It hasn't been easy to continue to hold with how much I have invested, but I am sticking around as I do not want to sell at what is potentially the precursor to a very good run.
A bit to unpack here, so here is a summary of my questions:
1. Whats behind LTRs SP rise?
1a. Are the approvals/finance not a risk?
2. What is the view of CXO over the next few months?
2a. I think we are past the bottom, and now it is a waiting game?
2b. Is this time different for our SP movement?
2c. Did we solve our water issue?
Anyway, all thoughts are appreciated.
